Manila Office

Asian Cities

1H 2017

Economic overviewThe Philippines has been resilient despite the changing political tide and slow global growth. In 2016, the economy grew within government expectations at 6.8% placing it ahead of Asia’s fast growing economies such as China and Vietnam. Private consumption continues to largely contribute to economic growth which is still being fuelled by remittances from Overseas Filipino Workers (OFW) and the expanding outsourcing and offshoring (O&O) sector.

Surprisingly, investment expanded by 20.8% last year and further increased its share in the predominantly consumption-driven economy. Investments have been a bottleneck for the economy for several years and finally both the private and public sectors have started to execute investment plans, helping to create a resilient and sustainable long-term growth trajectory. In addition, the current administration has planned to increase infrastructure spending to 5.4% of GDP in 2017 to support this growth. We expect that while remittances will fuel growth moving forward, government spending and investments will start to account for a larger share of the economy and possibly start the structural shift to a more industrial based economy.